Vancouver Real Estate

[calgarygeologist]

Originally Posted by afc wimbledon

If I was an investor, offshore or otherwise, I'd welcome the massive price drop that all this is bringing, the 15% tax is already offset by the 20% price drop.

A drop in prices is usually good for investors but I think that they instability in regulation and potential for further government redtape is probably keeping a lot of investors on the sideline.

[Winsor_Pilates]

Originally Posted by blankall

It's actually prices that are down. Sales are down much further.

Prices dropping 20% from historic highs is not that big of a deal. They're still up like 30% year over year.

Prices are not down 20%
I'm not sure if you're misinterpreting things or deliberately trying to mislead the thread.

Here is the actual numbers from the September stats just released:
"The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $931,900. This represents a 28.9 per cent increase compared to September 2015 and a 0.1 per cent decline compared to August 2016."

So unless 20% and .1% are the same thing...??

[afc wimbledon]

Originally Posted by Winsor_Pilates

Prices are not down 20%
I'm not sure if you're misinterpreting things or deliberately trying to mislead the thread.

Here is the actual numbers from the September stats just released:
"The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $931,900. This represents a 28.9 per cent increase compared to September 2015 and a 0.1 per cent decline compared to August 2016."

So unless 20% and .1% are the same thing...??

It's a 20% decline since the high water mark of April 2016 though.

[nik-]

How many of these foreign buyers are really investors though? Aren't a lot of them just doing this to get their money out of China? Obviously they don't want a loss, but I would think gains are a bonus and not the original goal.

[Winsor_Pilates]

Originally Posted by afc wimbledon

It's a 20% decline since the high water mark of April 2016 though.

Nope, try again.

April 2016: "The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $844,800. This represents a 25.3 per cent increase compared to April 2015."

The benchmark in September was actually substantially higher than April ($931,900 vs $844,800).

[opendoor]

It's possible that both are correct. That chart was probably a simple average and if the top end of the market saw far less activity in August due to the foreign buyer's tax then it's possible the average price moved down that much. The Home Price Index has an entirely different methodology that's designed to avoid that kind of swing based on things at the top or the bottom of the market.

[Winsor_Pilates]

Originally Posted by opendoor

It's possible that both are correct. That chart was probably a simple average and if the top end of the market saw far less activity in August due to the foreign buyer's tax then it's possible the average price moved down that much. The Home Price Index has an entirely different methodology that's designed to avoid that kind of swing based on things at the top or the bottom of the market.

Correct.
Posting the average and saying "prices are down 20%" is very misleading and suggests typical properties have actually taken a 20% hit in recent months.

That's very different from saying "the average price is down 20% due to lack of sales on the high end of the market which disproportionately skews averages while not actually having any meaningful value change in typical properties".

[Flamenspiel]

Very interesting WP. Is it your position that its business as usual in Vancouver and you would advise a buyer to jump right in now? The global news item uses ZOLO's "real time data" and not the REBGV(which can be deceptive)and it shows a major correction:

[blankall]

Originally Posted by Winsor_Pilates

Correct.
Posting the average and saying "prices are down 20%" is very misleading and suggests typical properties have actually taken a 20% hit in recent months.

That's very different from saying "the average price is down 20% due to lack of sales on the high end of the market which disproportionately skews averages while not actually having any meaningful value change in typical properties".

Sounds familiar...What I actually posted:

Keep in mind this is after about a 50% increase, so we're still like 30% above prices a year ago.

Now a lot of this has to do with the top end, which was all foreign investment, just not existing anymore. Stuff on the lower end, isn't falling nearly as fast, but is likely to soon IMO.

You then accused me of deliberately trying to mislead and then backtracked once confronted with evidence that there had indeed been a 20% drop in average prices.

QED.

[afc wimbledon]

Originally Posted by Flamenspiel

Very interesting WP. Is it your position that its business as usual in Vancouver and you would advise a buyer to jump right in now? The global news item uses ZOLO's "real time data" and not the REBGV(which can be deceptive)and it shows a major correction:

There's another twenty or thirty percent to go, I'd wait.

[Winsor_Pilates]

Originally Posted by blankall

Sounds familiar...What I actually posted:



You then accused me of deliberately trying to mislead and then backtracked once confronted with evidence that there had indeed been a 20% drop in average prices.

QED.

What you said was "prices are already down 20%".
You could have given context that you were referring to average pricing and explained how that's actually useless, but that wouldn't help the argument you're for some reason trying to make.

I actually said I wasn't sure if you're deliberately trying to mislead or just misinterpreting things (tried to give you the benefit of doubt because a lot of people don't understand average vs benchmark pricing and that's understandable).
Considering you're still arguing it, clearly mislead it was.

[Winsor_Pilates]

Originally Posted by Flamenspiel

Very interesting WP. Is it your position that its business as usual in Vancouver and you would advise a buyer to jump right in now? The global news item uses ZOLO's "real time data" and not the REBGV(which can be deceptive)and it shows a major correction:

My position on it in brief:

1) Average pricing is never a good way to judge changes in pricing. It is easily skewed by the top or bottom end and doesn't show a clear picture of typical properties.
Saying prices have gone down 20% creates the illusion that a $1M property in April is now worth $800,000 and that is not at all the case.

Global shouldn't be using that either, but they want to sell headlines.

2)REBGV numbers are not deceptive. They use the same metrics every month, so regardless if up or down it's going to show you direct comparable.
Perhaps the interpretations can be weighted, but just looking at the numbers is as clean for stats as you'll get.

3) The major change in average pricing is due to the top end of the market shutting down since the foreign buyer tax was introduced (and it was already slowing before that).
Most of the market has slowed but pricing is dropped very little so far.

4) The next 1-2 months will be very telling. Will sales activity dropping lead to (real) pricing drops or will buyers on the fence since the foreign buyers tax re enter the market?
I honestly don't know, it's highly debated between people in the industry. I know a lot of qualified buyers are on the fence right now though.

5) Supply is still very low and inventory absorption is what we'd consider a "sellers market" in many property types. Until that shifts further to a "buyers market" I don't see a lot of price drops on those property types.

6) Yes, I still have buyers buying but we are very particular about what, where and why. I never bet on the market as a whole anyway; I prefer to pick the right properties like picking good stocks.

I could keep going but I'm off to the Flames game

[Locke]

Not sure if this was mentioned, but I ran across it today.

Want to keep your million-dollar luxury pad in Vancouver empty? Get ready to pay $10,000 (US$7,450) annually in extra taxes. Lie about it? That’ll be $10,000 a day in fines.

Canada’s most-expensive property market, suffering from a near-zero supply of rental homes, announced the details of a new tax aimed at prodding absentee landlords into making their properties available for lease. The empty-home tax will take effect by Jan. 1 and will be calculated at one per cent of the property’s assessed value, Vancouver Mayor Gregor Robertson told reporters at City Hall.

http://business.financialpost.com/ne...housing-crisis

[CorsiHockeyLeague]

They never clarify where this applies, though. Vancouver proper only? Does it apply in Burnaby or West Van?

[Locke]

Originally Posted by CorsiHockeyLeague

They never clarify where this applies, though. Vancouver proper only? Does it apply in Burnaby or West Van?

In fairness it seems like a fairly 'slap-dash' reaction.

Typically you have to really allow time for markets and purchasers to react to things like this rather than "hey guys, theres a fine going into place in 90 days. Have fun with that!"

For instance, in my experience if you see Governments institute something like this with a punitive back end they're typically trying to catch people out.

I mean, come on, if one average person gets caught with that $10K/Day penalty for more than a couple of days they're going bankrupt.

[snootchiebootchies]

Could be that city officials have been emboldened by the positive reaction to the 15% foreign buyer's tax so now they are doing something even more aggressive to free up housing space. I'm betting there will be more blowback surrounding this policy as it will affect more Canadian citizens.